No Hope: Private holiday lets

Justin in Paris has made 90,000 dollars. Daren in London has raked in 100 grand. In Mallorca, you can expect to coin in 2003 euros per month.

An advert on a Facebook page demanded a damn good clicking. Make money in Spain, it said. Rent out your place to travelers (all American travellers, therefore, as they are lacking an “l”) and make 75 euros+ per night. Interesting, I thought. Not because I want to rent out to travelers or even travellers, but because it is quite possible that anyone wishing to – in Mallorca – shouldn’t.

On the site, there was Daren, relaxing, sound in the knowledge of the 100 grand he had made. Novi from San Francisco was smiling, thanks to her 30,000 dollars. Justin looked suitably satisfied with his ninety thousand.

The 2003 euros was the calculation for a month to rent out an apartment in Palma or Pollensa. I went and had a look. Was anything actually available in Mallorca? Yes. Not much, but there were some places. By the night or longer. Some with photos, some without. Not having a photo doesn’t really “sell” a place, but there might be good reason for there not being a photo.

It’s kicking off again. The periodic wielding of the holiday-rental stick. The tourism ministry and friends at the tax authorities are spending their days in earnest perusal of websites, mainly British ones, seeking to identify properties for holiday rent. An announcement was made last year that web pages in particular would come under scrutiny, and a similar announcement has been made this year as well.

John Lance, in his letter to “The Bulletin” (Saturday, 2 July) made the point well enough, as he has in the past, about the lunatic situation in respect of holiday lets in Mallorca. The “grey area” he referred to isn’t really all that grey. Want to now license your property for holiday rental? You can’t.

There are plenty of properties which are licensed but they date back to and before the registration of, when was it, three, four years ago. Even then, however, there was massive confusion, and the dice were heavily loaded against apartment owners. The greyness of the situation is especially so with apartments, but it isn’t so grey if you accept the version which states that you cannot rent out private apartments as holiday lets at all.

The tourism ministry has wielded its stick. In February, there were reports relating to action taken against owners of apartments in Santa Ponsa, to what was being offered, and to the fact that the apartments were being advertised via a UK website. And then there were the fines. Up to 30,050 euros.

We know the arguments in favour of more relaxed rules on holiday rentals: not everyone wants to stay in a hotel; tourists in private apartments and villas tend to spend more; a mix of accommodation types reflects the diversity of the tourism market. We know the hoteliers’ arguments against: they have the hoops they have to go through; they invest heavily; they are a key source of employment. Like the endless all-inclusive debate, none of the arguments are new.

The hoteliers can, however, be somewhat disingenuous. When the Santa Ponsa reports were coming in, the head of the local hoteliers’ association said that the competition from private apartments was unfair. Yes, but turn it around. Owners could argue the case of restriction of trade and of unfair competition that denies them the chance to properly register and market their properties.

As John Lance remarked, this could all end up with Europe getting involved. But for property owners, the problem is the lack of any co-ordinated voice. The hoteliers know this, and so, as importantly, does the Balearic Government.

It might be remembered that the hoteliers, well before the elections, expressed concern as to the appointment of Carlos Delgado as tourism minister. Now they express contentment, and Delgado, who one might hope might be more willing to throw off the shackles of trade restriction, has announced his intention to collaborate with the hotel sector in making the tourism law more flexible. And one aspect of this is the residential use of tourist establishments. Owned by the hoteliers, I think we can assume this to mean.

Just as is the case with its dealings with the major tour operators, a government in the Balearics, be it PP or PSOE, cannot afford to alienate the hotel sector. If there was hope that the private rental market might be treated more favourably by the new government, then I’m afraid it was probably a forlorn hope. And it will remain one.

Any comments to andrew@thealcudiaguide.com please.

Open House: The holiday-lets nonsense

There was an open letter the other day to “The Bulletin” from the boss of a UK holiday-let company. It was addressed to the tourism minister, was not without merit and has, seemingly, attracted support, to the extent that the same writer is now wanting to form some sort of pressure group. It was, as you would realise from the nature of the company, about the lunatic situation regarding holiday lets. Fair enough, and a fair way of generating publicity, you might imagine, but let’s not be cynical.

The open letter is a familiar enough technique. One of the most famous was Zola’s “J’accuse”. It acquired fame not only because of the accusations made but also because of Zola’s standing and influence in France. And it is this, standing and influence, that makes the open letter powerful. Moreover, the fact that it might actually be read by those for whom it is intended, makes it doubly powerful, which was the case with “J’accuse”. Zola had to flee to England.

I had heard of neither the author of the letter nor of his company until the letter appeared. No Zola, in other words. It might have been considered rather self-serving. Yet, it was a reasonable letter, one that expressed well the frustrations surrounding the confused holiday-let situation and the antagonism shown towards a sector of the tourism industry in Mallorca that has enormous potential for good. I might not go along with the technique of the open letter – and don’t – but the sentiments cannot really be faulted.

The problem is though, has the intended recipient – the tourism minister – read it. Will she read it? If the answer is no, then what was the point of it? Even if she has, or does, would she be likely to respond? Doubtful. But were she to respond, what would she say? Thanks, but no thanks, or something along those lines.

You have to go back to June last year to get a real handle on this. On 19 June (“But You Can’t Come In”), I reported on the agreement between the Balearic Government, business (hoteliers) and unions to tackle the principal problems with tourism, one of which was – so they reckoned – illegal holiday lets. And many holiday lets are illegal, because there is no mechanism to make them legal, which is how the government seems to want it. It is government strategy to outlaw as much of the holiday-let business as it can. It is also government wish to pursue ever greater standards in hotel stock. It should not be forgotten that, of the leading Mallorcan companies, several are hotel chains; they are extremely powerful. They are also highly organised and represented on all manner of tourism bodies. The holiday-let sector, on the other hand, is not organised, lacks representation, has no lobbying power, is fragmented. When the press come calling to ask for reactions to the appointment of the latest tourism minister (and they’ve had to do this a few times over not so many months), to whom do they talk? The holiday-let business? Of course not. It is to the hotel associations, those who always seem to express their full confidence in a new minister. They express confidence, not because they necessarily have any, but because they want they want to establish who wears the tourism trousers, and to let ministers know who not to antagonise. Get a campaign going for holiday lets, get a tourism minister listening, sympathetic even, and what do you reckon would happen? “Now then, Sra. Barceló, a little word in your shell-like over this holiday-let nonsense …”

Try starting a campaign if you are some small holiday-let business from the UK or another foreign country, and where do you reckon this will get you? Foreign companies can exert pressure, if they are powerful, the tour operators most obviously. And maybe it is these, the likes of TUI and Thomas Cook, who should be the real recipients of the open letter, for they want a flourishing holiday-let market as much as they want to be able to extract every last concession from the hoteliers. They also want to sell flights.

Joana Barceló will take precisely no notice of this “campaign”, because it would be politically unwise for her to do so. But if there is to be an open letter to her, then rather than “The Bulletin”, try the Spanish press. She might then read it.

I am, however, not unsupportive of the letter and of the writer, because he has done what the paper singularly failed to do when the tourism minister was interviewed, namely ask what the hell she’s going to do about holiday lets, other than place them outside the law. It is an issue that affects many and is important in the context of the total tourism scene; one also that is regularly aired in the paper – by letter-writers. But why does it fall to a letter-writer to raise the subject or to start a campaign?

Any comments to andrew@thealcudiaguide.com please.

Protection

Back to the letters page in “The Bulletin”. I thoroughly commend the letter about holiday rentals that appeared yesterday. 

 

Here is an area, holiday rentals, that tells you much of what you need to know about how officialdom works or rather doesn’t work. It is an area of confusion, lack of clarity, massive doses of self-interest and arguably protectionism and anti-competitiveness. That’s a pretty damning charge sheet. 

 

The letter-writer draws attention to information from the regional government tourism ministry, which, he says, states that an apartment may be rented out without any licence so long as it is not marketed as a holiday apartment. He also draws attention, news to me I must say, that holiday accommodation cannot be marketed by local estate agents. In other words, all those agencies which are doing so, and their number is vast, are breaking the law. You can add in the confusion surrounding the rent of other property, whether villa, finca, house; add in whether apartments in a block must all be on the same basis and have a reception area; add in the fact that licences for finca rental cannot now be obtained. Add in all this lot, and you have the most God awful mess.

 

Holiday rentals are an important part of the tourism mix. They are important for the very simple reason that not everyone wants to stay in a hotel. But herein lies the rub. The government and of course the hoteliers want everyone to stay in a hotel. They are misguided, narrow-minded and wrong. The hotels exert enormous influence both economically and politically in Mallorca – and justifiably so. Tourism growth was largely the consequence of investment in hotel stock. Many hotel chains and hotels rank as excellent. Mallorca’s leading hotel chains are international players, while locally they appear at the top of the list of the island’s wealth-generating businesses. They have a right to preserve what they have created, but not at the expense of a mixed tourism market. The hotel lobby, though, has been the strongest voice in seeking government curbs on the holiday-rental market. It is the hotels’ self-interest which has led to much of the current confusion as legislation, communicated unclearly and implemented haphazardly by local and regional government agencies not clear themselves as to the legislation, has been heaped upon the wider tourism market in an attempt at gaining market protection. There is more than just a hint of discrimination as well. Many apartments and other holiday-rental accommodation are foreign owned. 

 

Notwithstanding regulation that seeks to ensure that taxes are paid and that safety and quality standards are adhered to (and such regulation is to be applauded), much of the rest is a nonsense. Just go back to that bit about not marketing a flat as a holiday apartment. This is the tourism ministry saying so. What else is tourism but holidays? This is ridiculous.

 

The holiday-rental morass is indicative of a wider malaise, one of legal obfuscation and sometimes protectionism by the backdoor. One only has to consider the lunatic situation regarding bar closing times to appreciate how such obfuscation can be played out. Calvia town hall closed bars at 11, interpreting a new law which classified “evening” as ending at 11. The relevant ministry, environment, told them not to. What was the point of the new classification in that case? Take another example – driving licences. How many residents are clear what the rules are? Or another, that in respect of boat charters and the enormous fines being levied. Where’s the fairness?

 

Democracies operate on the basis of fair, just and transparent legal systems, but one cannot avoid a conclusion that not all is right with the operation of local legal systems and their subsequent implementation down the chain of governmental levels, unclear as to what they mean. Too much seems to be made up on the hoof, superimposed on previous legislation and then left open to all sorts of interpretation. And the holiday-rentals market is a classic example. 

 

All too often the response to such situations is a shrug and an “oh, well, that’s Spain”. It doesn’t wash any longer, especially where an important part of the tourism market – and a revenue-generator for governments – is concerned. It should all be very simple. You have some accommodation and wish to rent it out. Fair enough, obtain the relevant licence, meet the relevant standards and pay your taxes. Simple. But not. Because, for example, the process to obtain the licence in the first place would fall down the great black hole of local bureaucracy. And because also there is a powerful group that will do what it can to stop you.

 

They need to get it sorted, but they won’t.